Bank customers are alienated and feel like a number, research shows

GONE are the days of your trusted local bank manager helping you get a home loan. Now, customers feel like numbers as the computer says “no”.

RELATIONSHIPS between banks and customers are on the decline, with the reliance of lenders on big data making people feel like numbers, a new survey revealed.

The Pepper money survey of 1002 Australian adults found 44 per cent did not feel their financial institution had their interests at heart, while 42 per cent said their bank did not understand their financial goals. A worrying 63 per cent withhold information from financial institutions.

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The top reasons for customer alienation were fees, the bank’s focus on business profits, a lack of understanding about real life situations, a sense banks are out of touch and a feeling that customers were not valued.

The days of the trustworthy local bank manager helping families realise their dream are long gone, according to Pepper Money managing director for Australian mortgages and personal loans Mario Rehayem.

“In the past, managers were empowered, they had lending authority and responsibility for making decisions on behalf of a branch,” Mr Rehayem said. “Today, when you apply for a loan, it is assessed at a central service centre where the decision is made by an algorithm or computer … banks have lost the human touch and empathy towards any form of credit assessment.”

These algorithms may be the most efficient way for banks to stay in line with APRA regulations, but lack the human touch offered by smaller lenders, who are able to assess people’s personal situations.

Courtney Bowie had her loan application rejected. Picture: Justin Lloyd

“They commoditise the process and become reliant on computers and algorithms,” Mr Rehayem said. “Eighteen per cent of Australians are being turned down purely because they didn’t fit that commoditised process.”

Sydney lawyer Courtney Bowie was rejected for a home loan because her business was less than 12 months old, despite earning good money and only needing to borrow 50 per cent of the property’s value.

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“You would think there would be a little bit of leniency,” Ms Bowie said.

Eventually, she got the loan in her fiance’s name only, but had to then prove she was not dependent on him.

She said in the future she would explore other alternatives as her bank had proved itself out of touch.

“The way the workforce is moving towards non-traditional work, the banks really aren’t keeping up,” she said.

Originally published as Bank customers are alienated and feel like a number, research shows